Please ensure Javascript is enabled for purposes of website accessibility

Why Tiffany Stock Lost 18% in November

By Demitri Kalogeropoulos - Dec 7, 2018 at 10:07AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A global growth slowdown wasn't what investors were hoping to see heading into the key holiday selling season.

What happened 

Shares of luxury jewelry retailer Tiffany (TIF) trailed the market last month, shedding 18% compared to a 1.8% boost in the S&P 500, according to data provided by S&P Global Market Intelligence.

The slump put the stock at a new yearly low despite having been up by more than 30% at one point in 2018.

So what

Investors weren't happy with the company's fiscal third-quarter report, which was released late in the month. That report showed surprisingly weak sales growth in many key markets, including Japan and the U.S. Executives blamed the slowdown on scaled-back spending on the part of Chinese tourists, who constitute an important demographic for the retailer. Tiffany also revealed lower profitability as management spent heavily in areas like marketing, labor, and the online selling channel.

A woman wearing diamond jewelry.

Image source: Getty Images.

Now what

These spending initiatives are expected to lay the groundwork for faster, more sustainable growth ahead. But at least for 2018, they'll result in lower profitability. Notably, Tiffany left its short-term sales growth outlook unchanged despite the fact that the prior quarter missed management's targets. Thus, the jewelry giant is on track to increase annual sales for the first time in years, which would mark an important step in its wider global recovery plans.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Tiffany & Co. Stock Quote
Tiffany & Co.
TIF

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.